Having to face up to more manufacturing issues as you are being sized up for a potential multi-billion buyout is not ideal, but that's the position Soliris' maker Alexion ($ALXN) is in. The company said today it is recalling the final vials of one lot of the orphan drug from international markets because of particles detected in some of them.
The Cheshire, CT-based drugmaker said in a financial filing today that the voluntary recall represents about 1% to 2% of the monthly vial consumption. It said the problem is tied to filling by a third-party contractor and that it will replace the recalled products with new vials from another filling contractor that is free of issues. It said it did not expect the the recall to lead to a shortage of Soliris. That is the same thing the company said when in March the FDA issued a warning letter for its Rhode Island manufacturing plant because of issues with bacterial contamination.
The timing is tough for a company that is reportedly the potential target of Swiss drugmaker Roche ($RHHBY). There are reports that Roche has hired Goldman Sachs to advise the company after it made an informal approach in July for Alexion, which has a market cap in excess of $20 billion. Alexion makes Soliris for the life-threatening blood disorder paroxysmal nocturnal hemoglobinuria, a disease that only affects about 8,000 Americans. But at up to $400,000 per year, Soliris is believed to be the world's most expensive drug. Alexion had Soliris sales of $1.13 billion last year, and the drug is projected to hit more than $3 billion in sales in 2018.
But the company has been trying to carefully manage market expectations for the drug since the FDA issued the warning letter for its manufacturing problems. A month later, it said it had a team of outside experts in place and believed it had already addressed the problems highlighted by the FDA. It also let the market know it had backup manufacturing in place if production at the Rhode Island plant had to be halted.
The company emphasized its backup operations in the SEC filing today. It said that in addition to a second contract "vialer," it has a new contract with a supplier it expects will be ready to distribute product later this year. It has a fourth contractor that it hopes to have approved next year. It said it was notifying the European Medicines Agency and other health authorities about the recall.
- here's the SEC filing (PDF)
Special Report: Soliris - Top 20 orphan drugs by 2018
Editor's note: This story was updated to make clear that the recall is because of particulates found in some samples and not glass particles.